He said his emergency Brexit budget, predicted before the referendum, would not be necessary until the UK formally applied to leave the EU, which is expected when the new prime minister is in office in the autumn.

Meanwhile, many employers are planning employment freezes in the wake of Brexit, according to a survey by the Institute of Directors (IoD).

The leading business group surveyed 1,000 of its members and found a quarter were planning freezes while 5% were planning job cuts.

The FTSE 100 performed better than expected on Monday morning, falling by 0.46% after Osborne’s speech before the markets opened.

London’s premier index dropped 24.75 points to 6,114, a vast improvement on the collapse on Friday.

Trading in the shares of two banks fell by so much the trading had to be suspended.

Barclays share price fell by 10.3%and RBS by 15%, triggering an automatic stop on trading to allow them to recover from the downward spiral.

Shares in housebuilders also took a dive, with both Taylor Wimpey and Persimmon slumping. Foxtons, which issued a Brexit profit warning, plunged 17%.

EasyJet also fell by 14%, following a statement saying it will take a £28 million hit following two months of turbulence, adding that Brexit would have a negative impact on the airline.

Stefan Rousseau/PA Wire
Chancellor George Osborne speaks at The Treasury, London, where he moved to try to calm market turmoil triggered by the pro-Brexit vote

"The biggest faller in early trade however is easyJet, with a profit warning having been issued by the airline, highlighting the damaging effects of a plummeting pound and the accompanying economic uncertainty.

“There’s still an awful lot of questions that need to be answered as to what happens next and until we see some clarity here, the volatility is likely to continue.”

Moody’s said that Britain would face substantial challenges in order to successfully negotiate its exit from the EU.

“During the several years in which the UK will have to renegotiate its trade relations with the EU, Moody’s expects heightened uncertainty, diminished confidence and lower spending and investment to result in weaker growth,” the agency said.